Chairman: Good morning. Thank you very
much for coming to see us and inaugurating the public sessions
in this inquiry. If you think we are not up to full numbers today,
that is partly because two of our colleagues are having to shuttle
backwards and forwards between this and the Hunting Bill Committee
next door on which they are serving. Another of our colleagues
is in the chair for that, in addition to which another of our
colleagues is in Kosovo. One reason we invited you is because,
when your organisation appeared before us last time, we regarded
the evidence you provided as particularly valuable, so we are
going to launch straight into questioning with Mr Fearn.

Mr Fearn

1. You argue that the White Paper lacks an overall
framework clarifying the role of public service broadcasting.
What would you see as the main elements of such a framework which
are missing, if any, and there must be some.
(Ms Bradley) What we have in the White Paper is a
restatement of what we already have which are some very broad
parameters for public service broadcasting of the BBC, which are
encapsulated in the Charter.

2. You are not saying that the White Paper is
useless?

(Ms Bradley) No, but it does not take
the debate further forward. You have the existing situation where
you have some very broad parameters for the BBC, some very specific
requirements laid on the other public service broadcasters. The
sort of thing that we would wish to see in a framework for public
service broadcasting would require a much closer look at the purpose
public service broadcasting fulfils for consumers. Our thoughts
on how that might be done are to look at some of the characteristics
of markets and services, products and services, which consumers
should expect, particularly where there is a universal access
requirement. In other words, we think everyone should be able
to access it. Some of the issues we think need to be addressed
in that framework are, first of all, the need for universal access;
the need for choiceand I would emphasise here that we are
talking not just about many providers but diversity of offering.
One can have three providers and much diversity. One can have
ten providers and no diversity at all. A very strong emphasis
on consumer information. Equal treatment of consumers and that
addresses the need to meet the needs of disadvantaged consumers
as well as general consumers and proper consumer redress. We want
all of those issues addressed in the public service broadcasting
framework and criteria developed for measuring whether or not
particular offerings are part of the public service broadcasting
role.

3. You mentioned the disadvantaged people within
the community. What about subtitling? How important is that to
consumers? How many use subtitles at the moment? Have you any
idea?
(Ms Lennard) As far as we are aware, about five million
people use subtitles regularly and obviously more will use them
frequently.

4. Are those people who are generally deaf or
hard of hearing?
(Ms Lennard) Yes.

5. Or elderly or people who just like to read
subtitles?
(Ms Lennard) People who have hearing impairment.
As well as those, we are also concerned about people with other
types of disabilities, with visual impairment, for whom the switch
to particular screen-based information is going to be difficult
in the digital age. We think far more proactive work needs to
be done in terms of public policy, but also initiatives by the
industry, because universal access is the overriding concern.
This is not a small market for the industry and there needs to
be far more action by government and by industry, making sure
that the services and the equipment which delivers them are fully
accessible by people who have various types of disability. That
is the way we will achieve proper social inclusion.

6. Do you think the White Paper takes forward
government policy on early analogue switch-off? We hear of 2010,
which seems a long way away.
(Ms Bradley) Our view is that the policy on analogue
switch-off was developed prior to the White Paper and is again
restated in the context of the White Paper. We have some particular
concerns about analogue switch-off. There is in effect very little
done to help consumers to allow earlier switch-off to take place.
There is not the thoroughgoing information campaign which would
be needed to explain to consumers what the options are and what
the benefits might be. Consumers are very confused about what
to do and voting with their feet, as consumers do when they are
confused. We are also concerned to know how the Government will
address that question about the residue, and there will be a residue
no matter what happens in the next period of people who

7. Five million?
(Ms Bradley) Yes, who will not buy into digital and
are interested to know about whether or not they will consider
using the funds from analogue sales to support the final step.
(Ms Lennard) We thought the two key tests laid down
by the Secretary of State were admirable. The problem is about
the clarity of detail and how one achieves particularly that universal
access to digital equipment. The White Paper is not particularly
clear on that. We are also represented on the DCMS Advisory Group
on digital switchover on the information campaign and on the viewers'
panel. We are very pleased to be there but we have felt that there
has been an insufficient lead from the Department in terms of
public policy. Given that we now have digital broadcasting and
equipment in shops, people need to be confident that the information
that they can obtain is both objective, independent and easy to
understand, which is not a mean feat in this area.

Mr Fearn: We have noted insufficient
lead from the Government. Thank you.

Derek Wyatt

8. Do you have any reservations at all on the
idea of an OFCOM?
(Ms Bradley) No. We have been campaigning for a single
regulator that should cover both economic and content questions
and take a flexible approach to regulation across the whole of
the communications sector for some three or four years. We are
very pleased to see that the Government have now adopted this
view too.

9. Do you feel on the public service side that,
in digital, firemen, doctors, A&E and perhaps yourselves should
have your own special channels?
(Ms Lennard) It is not something that has been exercising
us. We are very pleased with a lot of the White Paper and much
of it is what we have been lobbying on for quite a number of years,
but there are some deficiencies linked to the absence of a proper
framework for public service broadcasting. We need a discussion
about the long term funding of public service broadcasting, not
only the viability in future of the licence fee but also the pressures
on ITV companies, on their advertising revenue. If we are going
to have public service broadcasting delivered by a number of broadcasters,
not simply one, how can we secure and enhance its long term future?
How can we encourage new entrants into the market to broaden the
scope of public service broadcasting? We think we have to have
a much more imaginative debate about all of the possible options
for funding in the future.

10. Do you accept that digitisation will happen
in one form or other and inevitably that will lead to a decline
in viewership for BBC1 and BBC2? Nobody watches BBC News 24; good
luck with 3 and 4; nobody would watch those either. As fewer people
watch the public service, the public will therefore say, "Why
are we paying for it?". That is not mentioned at all in the
White Paper. In 2010, the BBC will not be there in the same form
it is now. We ought to be having these discussions now to protect
public service broadcasting. How would you fund it?
(Ms Bradley) We absolutely agree with you that we
ought to be having these discussions now in order to protect public
service broadcasting. I take issue a little with the vision you
have which is that it is quite possible that there might be more
players in the public service broadcasting ecology rather than
fewer, but if that were to happen we need to have a very clear
sense of what public service broadcasting is there for and how
it can be achieved and we need to look at different ways of funding
it, which comes back to your question. One of the questions we
want to explore further is the question of having some additional
public service broadcasting fund. It may be additional to the
current arrangements for the BBC. In the longer term, they may
be drawn into that as well, but we would certainly create a new
fund for potentially new entrants not just to broadcasting but
particularly to public service broadcasting so that the number
of players increases.

11. A way of doing that would be just to let
the OFCOM director general take ten per cent of the licence fee
and keep it and for people to bid for a public service chest.
Artsworld and Performance are two arts channels which are public
service which the BBC will not do; yet they want a stack of money
to do it on BBC3 and 4. Sport does not have a public service channel.
The BBC will launch a commercial channel in the Autumn. They refuse
to do the school curriculum through BBC education. They have made
education not one of their public services now, which I find quite
disgraceful. I would like a fund of £300 or £400 million
to be able to put the school curriculum on television. I think
that is a public service. If they are not prepared to define it
or fulfil it, who will do that if it is not OFCOM?
(Ms Bradley) It should be OFCOM. Whether OFCOM should
be top-slicing the licence fee money which goes to the BBC for
public service broadcasting is a separate issue.

12. Where would you get your money then if you
would like a fund? We paid for the Open University with a £3
million allocation in 1968 from the licence fee. This is not a
new phenomenon.
(Ms Bradley) No, and we need to look at whether we
can manage within the amount of money available for public service
broadcasting right now. Until we have defined what we want from
public service broadcasting, we are not in a position to say how
much money we need to fund it. The arguments you are making are
very good ones to support the case for bringing the BBC under
the OFCOM umbrella. It just does not make sense from the consumer
point of view to have the major broadcaster outside the orbit
of OFCOM. We do not believe that arguments about maintaining editorial
independence in any way support the need to keep it separate.
Indeed, there is a real sense in which those arguments suggest
somehow that by being regulated in a different way ITV and the
other broadcasters are constantly interfered with. That is clearly
not the case. We wish everyone to be brought under the same umbrella.

Chairman

13. On the public service remit of the BBC and
other public service broadcasting, Mr Wyatt has said the BBC is
going to fund BBC3 and 4; nobody will watch them but good luck
to them anyhow. To what extent ought we to wish good luck to them?
One of these is to be a youth-orientated channel. We have just
had the launch by Channel 4 of their E4, which is a youth-orientated
channel. Do we really need to spend public money on another which
nobody will watch? Even Channel 4 are saying that what they are
hoping for, to begin with, on E4 is 100,000 viewers. That is a
risk they are taking. Again, Mr Wyatt spoke about the arts channel
and the point that we have two already. Both of them are very
serious channels; they do not trivialise. Do we really need another
out of public money? It may well be the audience will be very
small and one moves along further. We have had a discussion with
an expert earlier today and he took the view, which I think is
already being borne out by developments, that in order to retain
a substantial audience, the BBC on its main channels has already
begun a dumbing down process. To what extent do you believe that
the BBC can dumb down in order to retain viewers with the BBC
while retaining the justification of a licence through a regressive
poll tax to finance something which many people may no longer
define as public service broadcasting in any case?
(Ms Bradley) All the questions you raise are very
important. We would ask them too. I cannot say that we have answers,
precisely because we do not think it is clear how the respective
roles of the BBC and the other public service broadcasters are
balanced and whether, in our overall framework for public service
broadcasting, we are seeking, for example, to have only one channel
of each of the sorts that might be defined, or one offering, or
whether we want to have a diversity and what the difference in
those channels might be if there is a claim that they are diverse
and serving different audiences. We have no idea, because we have
not considered it and it is a policy decision, what size audience
justifies public expenditure. We have not looked at the difference
between licence fee funding and funding through general taxation
as ways of paying for these things more equitably; or indeed raising
money by other means. We go back repeatedly to the notion that
there must be a clear statement which takes into account this
jigsaw of providers of public service and sets the BBC not apart
but alongside the other providers.
(Ms Lennard) We do not think it is possible or very
wise to make decisions about proposals for new BBC services without
going back to not only the performance and role of their current
digital services but the overall remit and position of the BBC.
When we did our report on public service broadcasting a year or
two ago, we were very supportive of the BBC as the cornerstone
of public service broadcasting, but we were struck by the generality
of its obligations. Whether decisions are taken about whether
or not it is dumbing down has to be set against what criteria
one is using to assess that. The current remit of the BBC lays
down such general criteria for BBC television and radio services.
We do not want them to be so detailed that they go back to box
ticking, but they have to be much clearer than they are and lend
themselves much better to independent scrutiny and to be seen
within this overall map of public service broadcasting. There
may well be a case for there to be a diversity of channels on
a particular aspect, particularly as the BBC is offering channels
without advertising, which is another aspect of viewer choice;
and yet again if the BBC were within OFCOM it may decide that
a commercial channel should be offering a particular service rather
than the BBC in a perfectly valid way, as long as that is taken
in a transparent decision-making process. Again, it is the criteria
and map of public service broadcasting, so we can see where the
BBC and the other providers sit. In terms of consumer interest
in public service broadcasting, the latest ITC research does show
very considerable support for the free-to-air channels, even in
multi-channel homes, but what we are trying to do is predict consumer
behaviour over the next few years which, in communications above
all, is a very tricky act to follow.

14. In relation to the public service remit
and the nature of public service broadcasting without advertising,
so far as I can see the BBC to a considerable degree, in order
to be able to do what it regards as public service broadcasting,
is hybridising it in any case. I stuck doggedly through the three
episodes of The Greeks broadcast over the last three weekends.
They were not really BBC programmes at all; they were mid-Atlantic
programmes, jointly financed with Americans, with lots of American
experts put in in order to make Americans feel it was acceptable
to them. There was an absolutely brilliant actor as commentator,
Mr Liam Neeson, who was clearly chosen because his Irish accent
was acceptable on both sides of the Atlantic. Is that really the
kind of public service broadcasting which we look to from the
BBC? I suppose it was serious to the extent that it was very stodgy.
Secondly, when you say the BBC is programming without advertising,
would that extend in your view to BBC Online? The Secretary of
State, when he came before us, took the view, which is a view
I share, that there is no conceivable reason why there should
not be advertising on the online service because it is of an entirely
different nature from advertising on televised or radio services.
Thirdly, the licence. From 1 October, several million people are
no longer paying for their licence and the licence is simply a
paper token, I am glad to say, as far as they are concerned. There
are rumours that the Government may extend that perhaps to all
pensioners. On that basis, can the licence survive as a way of
financing the BBC through public funds?
(Ms Bradley) On the commercialisation of public service
broadcasting, the commercial imperative impacting on the quality
of public service broadcasting which I think is the root of what
you are saying about The Greeks, and other broadcasting, it seems
to us that this is precisely one of the reasons why we need to
understand the BBC's public service broadcasting role. There is
no question that over the past period they have engaged in broadcasting
which is of a much more commercial nature. There is no distinction
being made between that which is fundamentally public service
broadcasting and that which is about revenue and income generation
and the positioning of the BBC as a major broadcaster in international
markets. In principle, we have no difficulty with the BBC having
a role in both respects and there is no question that economically
it must be a good thing for the BBC to be active in those international
markets, but if there is no clarity about the role that the BBC
are fulfilling in public service broadcasting terms there is indeed
a danger that the standards which are applied and the intent of
the work will change. That means that we feel the BBC's role needs
to be as clearly defined as that of other public service broadcasters
so that we can differentiate those two elements. On the licence
fee, it is our view that the current situation is probably not
sustainable because the more it increases the more of a burden
it is and, as you rightly say, it is a regressive tax. If it creates
a situation where great numbers of people do not have to pay,
because it is a regressive tax and they cannot afford to, you
reduce the overall pool. When we gave evidence in relation to
the Davies Committee, we said that the question about the licence
fee was really cart before horse. Until one had defined the role
and looked at what role the BBC was going to fulfil, one could
not possibly ask about funding. It may be the answer to the question
about funding was not a licence fee, at least not in the medium
term.
(Ms Lennard) On the online services, one has to come
back to what is the role for the BBC's public service and then
one can decide whether there should be advertising on it. One
has to clarify the role first and how it should be funded. We
have not taken a view on that but we are clear about the importance
of defining that role in the first place and, as a more general
answer, having the BBC subject to independent scrutiny and regulation,
so that these considerations can be taken independently by the
regulatory authority, backed up by, we hope, very strong, detailed
consumer research, both by the regulatory authority and the broadcasters.

Derek Wyatt

15. If we look at the landscape, it seems to
me that if you look at computer sales at Christmas worldwide they
were down. There seems to be an ownership factor of about 35 per
cent in the United Kingdom and it seems to be peaking. If you
look at cable and satellite distribution, it seems to be about
35 per cent, maybe the same 35 per cent, but there seems to be
a peaking of the sale. Then you have digital convergence or change
or WAP or whatever it is, but there are some fundamental, huge,
significant, technological developments coming. Do you think the
Government should just bite the bullet and say that it is so fundamental
that we should just give a box away free and enable the whole
community overnight, perhaps over 18 months in terms of getting
it ordered and putting it in position. We just cannot have this
fudge where the very wealthy can get access to the net and digital
but two-thirds of the population are just having four terrestrial
channels, five if they are lucky.
(Ms Bradley) This is slightly dodging your question
but our view is that the Government has a responsibility to ensure
in the end that everyone has access. We are a consumer organisation,
not a citizen organisation. One of the key differences between
the two for us are questions around taxation which are fundamentally
about what we want as citizens. As a consumer organisation, we
are very conscious of the fact that, by calling for action to
be taken by government, we are now allowing a burden on all of
us as citizens and we would be cautious about doing that if we
think it unnecessary. If we can arrive at a higher penetration
by means other than pure government subsidy, we should do so,
but there must be a very clear eye on the part of government,
which is partly the question we have about the benefits of analogue
sale and what is done with that money. If there is a residual
problem, the Government must bite that bullet and address it by
making the technology available.
(Ms Lennard) The White Paper has some very worthy
targets, particularly universal Internet access by 2005, but it
is not clear what universal Internet access will mean. One of
the questions we will raise in our response is what does that
mean but particularly does that mean access locally in the community?
What does it mean in terms of peoples' skills, knowledge and confidence?
We think OFCOM should have some duty to do with media literacy
and education in terms of promotion. There may be particular groupsfor
example, people with severe mobility difficultieswhere
it needs a public policy decision. Are there particular groups
that we as a society would wish to prioritise in terms of assistance
with equipment and use of those services? We are about to publish
this week some research we have done on consumers' use of online
services. It is no surprise that there is a particular lack of
confidence and access amongst poorer people, older people and
other disadvantaged groups. The other factors, as well as cost,
are those to do with confidence in terms of security of personal
information and confidence, knowledge and skills in using the
services. These are complex issues which the Government needs
to address quite urgently.

Mr Keen

16. You said the licence fee is not sustainable
and you argue that because you say it is a regressive tax. Is
that not nonsense? If you took it away and left it to the market,
if people were paying a so-called regressive tax of £100
a year, how much would they have to pay to get fewer programmes?
They would be paying an awful lot more, would they not?
(Ms Bradley) We are not saying that the licence fee
is definitely unsustainable. We think it may be. By saying that
the licence fee may be unsustainable, we are not jumping to the
conclusion that the market must deliver. Drawing on many areas
of the provision of goods and services, it is our view that there
are often areas in which universal service of the sort that we
wish to see as a society can simply not be delivered by markets.
There is a very great danger in many of those areas that market
failure will result. We think that will be the case for public
service broadcasting. We think there must be public funding, but
there are many ways of funding things publicly and many of them
are relatively invisible. We were astonished when we did our first
work on public service broadcasting how many people thought that
the only public service broadcaster was the BBC. They thought
that because they are the people who we pay a licence fee to.
What they did not acknowledge, because it is very opaque, is the
subsidies which other public service broadcasters effectively
receive by virtue of their access to the network, which is a source
of public funding, albeit in kind. If we did not subsidise it
and provide them with access, we would be selling it. That is
a cost to the economy, so there are many ways in which we fund
things publicly, and we need to look a bit more critically at
which are most appropriate in this environment.

17. I am not asking these questions in an antagonistic
way. Is it not nonsense to say that the BBC is a public service
broadcaster and Sky is not? What part of the BBC production is
public service? Education is one thing. Should that not really
be paid for by the Department for Education and Employment and
targeted at the curriculum? There are other educational programmes
which are put out for people like me who have no time to go through
a university degree. Most of the television I watch is either
football or education, just for the enjoyment of being educated.
It is nothing to do with trying to get some sort of degree. What
part of BBC production is what you class as public service broadcasting?
(Ms Bradley) We would say public service broadcasting
is about the diversity of programming not just in education but
in providing information and entertainment. Because of the very
particular role the broadcasting content and communications content
generally plays in giving us a sense of shared cultural identity,
one of public service broadcasting's major roles is to create
that across the spectrum of broadcasting. One of the things that
the BBC provides which other public service broadcasters do not
is one or two channels in which all of the content is effectively
public service broadcasting, because it covers the whole spectrum
of broadcasting that we might want in order to create that cultural
identity. That is a difference between them and ITV, for instance.

18. That is a really good definition of it which
I have not heard before in any of the sessions we have had. I
put questions last time to Sky. I said, "Is Sky News public
service broadcasting?" They said, "Yes." I said,
"Is the sports news from Sky public service broadcasting?"
They said, "Yes." I said, "Is extended football
public service broadcasting?" It is to me. They said, "Yes."
I was trying to show that the division we have now between public
services is not understood. I think we define it wrongly. Is the
BBC not to do with public service broadcasting versus not public
service broadcasting but a different way of paying for the service?
It is part of commercial competition but one is provided by everybody
for a universal fee. They get excellent value. If it is a regressive
tax, if you took that means of collection away from everybody,
what would poor people have to pay to get what they have been
paying £100 a year for? They would have to pay £500
a year.
(Ms Lennard) This is why we are extremely anxious
about the very serious danger of market failure in this respect.
In our report on public service broadcasting, we saw subscription
TV and pay TV as erecting barriers, particularly for those people
who cannot afford it or who may not want to pay for broadcasting
in that sense. The other component that we would see as extremely
important which relates to diversity is that of risk-taking and
innovation. Here, Channel 4 is a very interesting example of a
different kind of remit that one can give to a public service
broadcasting channel, but we would also see it as an extremely
important and integral part of the BBC's duty in terms of not
having those market pressures that commercial broadcasters have
in terms of worrying about advertising revenue, to do that kind
of risk-taking and innovative programming. As viewers and listeners,
we can criticise or praise the offerings given to us but it is
virtually impossible for us to say what we actually do want to
see. Occasionally, things will fail and we will see what we do
not want to see or listen to, but it is the risk-taking element
which is also critical.

Chairman: Thank you very much indeed.
That was very informative. One of the things I find very satisfying
about the evidence your organisation gives is that you are not
on any kind of tramlines. Thank you very much indeed.